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Programmatic Spending Comes To Africa

01 December 2016
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Widespread adoption of mobile phones has opened up the opportunity for programmatic advertising in Africa.

 

“The mobile advertising space is still in its infancy in terms of actual numbers, but it has huge potential,” said Anindya Ghose, a professor at the NYU Stern School of Business who has studied the global mobile marketplace.

Chinese companies like Xiaomi and Huawei are flooding the African market with cheap smartphones, enabling a shift from the feature phones that currently dominate, Ghose said.

“In the next couple of years, you will see penetration for smartphones shooting through the roof, and programmatic following,” he said. For now, market tracking is limited. No countries in Africa, for example, make Zenith Media’s programmatic forecast, which covered 46 of the top programmatic markets this year.

Dochase Media, a Nigerian ad network turned self-service programmatic platform, serves ads across Nigeria, Ghana and Kenya, where smartphone and internet adoption are highest.

“The African market is unexplored,” said Dochase founder Chibuike Goodnews. “In a few years, you could have 700 million [African] people accessing the internet. We are investing and positioning ourselves to be a major service and major go-to for African traffic.”

To make it easier for global advertisers to buy inventory in Africa, Dochase is hooking up as either an SSP or exchange to platforms outside the continent, like Criteo, smartyAds, Atomx and PLYmedia. Dochase also plans to connect to Bidswitch, which will connect its demand to multiple DSPs.

“There are a lot of foreign buyers that want to buy traffic in Africa,” Goodnews noted, adding that he carefully vets partners for quality due to “bitter experiences” with partners who served malicious ads.

On the local side, the platform has attracted advertisers like Frakem, an ecommerce site based in Nigeria that delivers building materials to busy professionals who don’t have the time to shop in person, according to Frakem COO and co-founder Festus Nwagbo.

Nwagbo uses programmatic for familiar reasons: scale and efficiency.

“There are hundreds of media houses,” he said. “It’s more cost-effective to go to the platform, where we can target categories of individuals.”

Plus, he can monitor results in real time and adjust the campaign parameters, making his buys more flexible than in the past.

Frakem only uses one other form of advertising: Facebook. In Nigeria, the internet community is paying close attention to the social network, which has set its sights on the continent. CEO Mark Zuckerberg visited earlier this year to tout its internet-beaming drones.

But Frakem limits its Facebook spend because of cost, which Nwagbo attributes to exchange rates. “Dochase is cheaper for us, and the content is in Africa.”

Despite Facebook’s presence in Africa, Dochase’s Goodnews doesn’t envision too much competition from foreign ad tech, as he says homegrown tech makes the most sense for the current market: “For tech to be relevant in Africa, it has to be tailored to the specific behavior and expectations and browsing patterns with people in Africa.”

Goodnews doesn’t see South Africa-based publisher co-op SouthernX, founded last year, as much of a competitor. Although the co-op has expanded outside of its founding country, Dochase said its programmatic platform offers more types of inventory in Nigeria and Kenya than the programmatic competitor.

On the supply side, Dochase has connected to hundreds of media houses in the countries it serves, and Goodnews is striking deals with telcos, a huge source of ad inventory in the country. To keep costs for phone access down, many phones come with ads on the lock screen, for example.

Local advertising budgets are low by European or US standards. For example, in Frakem reported revenue of $50,000 in its first year as an ecommerce company.

But local companies like Dochase and foreign ones like Facebook are arriving early to a growing opportunity. With Africa leapfrogging over desktop and going straight to mobile, problems like cross-device matching aren’t as much of an issue. Consumers are comfortable making purchases over their phones, since many never shopped using desktop computers.

Ecommerce companies like Frakem stand to benefit from this explosion and will ramp up advertising spend as more sales flow through mobile.

“Because [mobile users in Africa] are used to doing commerce on cell phones, they will do commerce on smartphones,” Ghose added. “I think it’s a huge gold mine waiting to be tapped.”...Read More

 

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